Cupboard had final week flagged the opportunity of a chrome ore export tax, amongst plans to assist home ferrochrome manufacturing.
The nation’s chrome ore mining business had “grown strongly” between 2010-2019, the council stated yesterday, whereas almost 40% of ferrochrome manufacturing had been closed or mothballed over the previous two years.
The council earlier reiterated, in a revised response, that the important element of competitiveness was the provision of a cheap and constant electrical energy provide, noting energy costs had elevated 523% up to now decade.
Glencore had decided in June to maintain its Lydenburg chrome smelter on care and upkeep till no less than the tip of the yr, as a result of “difficult working and market surroundings throughout the South African ferrochrome business, together with unsustainably growing electrical energy tariffs/provide interruption and different sources of actual value inflation.”
The council stated yesterday the uncertainty round electrical energy costs and reliability had a big impact on future planning for the chrome ore producers and built-in ferrochrome producers.
It stated Eskom’s winter peak demand tariff additionally penalised intensive customers, and greater than half of chrome and ferrochrome was moved by street not rail, which was dearer and hampered by infrastructure bottlenecks.
It stated options mentioned with the federal government, Eskom and Transnet had included growing the provision of the rail community, enhancing port efficiencies, reviewing the electrical energy cross-subsidy and peak tariffs and offering incentives for ferrochrome producers, equivalent to a S37E revenue tax profit for funding in updating the capital inventory of smelters.
“The Minerals Council chrome management discussion board is agreed toolbox of measures needs to be carried out to help the whole chrome worth chain to allow additional progress of the chrome ore producers and to stabilise the ferrochrome companies,” the council stated.
It stated the dialog was ongoing.
If chrome produced as a by-product of PGM mining was included, South Africa accounted for 78% of main chrome ore world provide in 2019, the council stated.
Nevertheless the nation’s ferrochrome manufacturing, which was three.6 million tonnes final yr, had fallen from 47% of worldwide output in 2010 to 25% in 2019.